New South Wales Supreme Court CITATION : Juric v Dimitriou & Associates Pty Limited [2004] NSWSC 982 HEARING DATE(S) : 20 October 2004 JUDGMENT DATE : 26 October 2004 JURISDICTION: Common Law Division JUDGMENT OF : Master Malpass at 1 DECISION : The judgment and orders of the Local Court are set aside and the matter is remitted to the Local Court for determination according to law; the defendant is to pay the costs of the summons; if so entitled, it is to have a certificate under the Suitors' Fund Act 1951; the exhibits may be returned. CATCHWORDS : Appeal - claim for assigned debt - misdirection - inadequacy of reasons - disproportionate costs of dispute over very modest sum. LEGISLATION CITED : Conveyancing Act 1919, s12 Legal Profession Act 1987 Pt 8A PARTIES : Cedna Juric (Plaintiff) Dimitriou & Associates Pty Limited (Defendant) FILE NUMBER(S) : SC 12243 of 2004 COUNSEL : Mr G Carolan (Plaintiff) Mr V Stefano (Defendant) SOLICITORS : Back Schwartz Vaughan (Plaintiff) Nemes Thomas & Co (Defendant) LOWER COURT Local Court JURISDICTION : LOWER COURT 1292 of 2003 FILE NUMBER(S) : LOWER COURT Coombs LCM JUDICIAL OFFICER : - 7 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Master Malpass 26 October 2004 12243 of 2004 Cedna Juric v Dimitriou & Associates Pty Limited JUDGMENT 1 Master: In or about December 1999, the plaintiff suffered injury in a motor vehicle accident. She retained Debbie Jane Paton (Paton), who practiced under the name Paton Lawyers, to provide legal services. On 18 March 2000, the plaintiff and Paton entered into a costs agreement. 2 On or about 27 April 2000, Paton's practising certificate was cancelled, Mr Brown was appointed as manager pursuant to Pt 8A of the Legal Profession Act 1987 (the Act) and Mr Philip Walton (Walton) was appointed as agent for the manager. 3 On 20 December 2000, Paton sold the practice to Walton. It appears that two documents were signed by these parties. One was an agreement for sale of business. The other was a heads of agreement. Thereafter, the business was carried on by Walton under the name Paton Lawyers. 4 The agreement for sale of business contained inter alia the following provision:- The Vendors shall be entitled to payment of all debts owing to business at the time of completion and the Purchasers will promptly account to the Vendors for all payments received by them relating to such debts. 5 The heads of agreement contained inter alia the following:- Mr Walton to recover all work in progress in respect of the said matters up to and including 8/11/00 including debtors and upon receipt of payment Mr Walton is to account to Miss Paton in respect of such moneys. 6 There is evidence to the effect that the heads of agreement may not have proceeded (whatever that may mean). 7 It is contended by the defendant that on or about 13 March 2001, Walton forwarded to the plaintiff two memoranda of fees. One related to work carried out up to 26 November 2000 and the other up to 29 November 2000. 8 On 14 February 2002, Paton and the defendant entered into a deed of assignment. It purported to assign to the defendant moneys owing to Paton by certain specified clients (the clients included the plaintiff). 9 It is contended by the defendant that notice of that assignment was given to the plaintiff. 10 The total amount of the two memoranda of fees was in the sum of $6,650.47. The plaintiff disputed the defendant's claim to these moneys. 11 Proceedings were commenced in the Small Claims Division of the Local Court. On the plaintiff's application, the proceedings were transferred into the General Division of the Local Court. A hearing took place on 23 June 2004 before Coombs LCM. The learned magistrate found in favour of the defendant in the sum of $4,000. 12 Both sides were legally represented. The lawyers purported to carefully plead their respective client's cases. Both sides were represented by counsel at the hearing. 13 It appears that the defendant had earlier brought other claims founded on the deed of assignment and that they had been heard by the same judicial officer. It appears also that in dealing with these claims, he had followed a practice of allowing part only of the sum claimed (it has been said that this was done on a quantum meruit basis). 14 Further, it appears from the transcript that initially he intended to deal with these proceedings without taking evidence and receiving full submissions. Following what was said by counsel for the plaintiff, he proceeded to receive evidence and hear further submissions. 15 A brief judgment was then delivered. It was in the following terms:- In this matter Dimitriou and Associates are suing Cedna Juric for legal fees which were sought for legal work done in respect of a motor accident claim. Insofar as I have to make findings of fact relating to whether or not there was a proper cost agreement, I find that the document filed in this manner is sufficient evidence to show that it was and that it bears her signature. As to whether or not she was aware of the assignment, I make the finding that on the balance of probabilities she received the document from Patons. As to whether or not the work was done, I also find that that work was done. The only question that remains – so I therefore make a finding for the plaintiff. The question then is now how much and how justified was it in all the circumstances. I am inclined to the view that I have stated early on in these proceedings and that is that it is a fairly sorry affair in the end and while some work was clearly done and there has been a file kept and all the rest of it, that it was perhaps in the end work that wasn't particularly well done. I am therefore going to make a finding for the plaintiff in the amount of $4,000 and costs as agreed and/or assessed? 16 In the course of dealing with a question of indemnity costs, counsel for the plaintiff (Mr Carolan) raised the following:- I don't have any instructions in relation to it, your Honour. Could I ask you to state some reasons for the record in relation to the contract point that I raised in relation to the entitlement of Dimitriou to take an assignment from Paton in circumstances where the issuer was Mr Walton. 17 The learned magistrate responded as follows:- Well, the issue was Mr Walton standing in the shoes of Miss Paton. Well, that would be my finding, but clearly the debt doesn't just disappear because somebody in the queue where there has been assignment all the way down the line, it just doesn't disappear. I mean, it makes a nonsense of the law if you do that. So, have you found that piece of paper? 18 On 20 July 2004, the plaintiff filed a summons in this court. It purports to bring an appeal from the decision of the learned magistrate. An appeal is available where there is error in point of law which justifies the disturbing of the decision of the Local Court. The onus rests with the plaintiff. 19 The appeal was heard on 20 October 2004. During the course of his submissions, counsel for the plaintiff raised a plethora of matters which it is suggested demonstrated error or law. Certain of these matters were not raised during the hearing in the Local Court. Certain of them do not fall within the confines of the grounds of appeal set forth in the summons. The grounds are as follows:- Magistrate Coombs erred in finding that the plaintiff received express notice in writing of the assignment of the debt from Paton to the defendant for the purposes of section 12 of the Conveyancing Act . Magistrate Coombs erred in finding that Ms Paton had rights in respect of the Bill of Costs issued by Mr Walton on or about 13 March 2001 and had assigned those rights to the defendant. Magistrate Coombs erred in finding that the defendant was entitled to payment of the sum of $4,000 on account of legal services. 20 It became clear during the course of submissions that the circumstances of this particular case had the potential to throw up a significant volume of issues (some of which may be of complexity). There is dispute between the parties as to what was put in issue by the pleadings filed in the Local Court. There is also some dispute between the parties as to what in fact was argued in the submissions put the learned magistrate. 21 What may be said to be the judgment delivered by the learned magistrate can be described as extremely brief. The disclosure of reasoning process is parsimonious. The reasons fail to identify what were the issues thrown up by the pleadings and argued by the parties during the hearing. The parties were in dispute as to what had been put in issue by the pleadings and it appears that these questions were left unresolved. The result was misdirection. It appears that findings were made in relation to matters that were not in issue and that matters that were in issue were left unaddressed. 22 What has been referred to as "the contract point", was initially passed over. What was subsequently said does not seem to me to be helpful. 23 What seems to have been advanced during the trial concerning "the contract point" involved a series of arguments on a number of matters (including considerations said to arise from Pt 8A of the Act and the contention that only Walton could maintain what was claimed by the plaintiff). During this appeal, it was sought to advance further matters that may not have been either raised or open at the trial (inter alia arguments founded on ss175 and 182 of the Act). There were real questions as to which, if any, of these arguments were open in the light of the pleadings. These questions (like arguments that appear to have been recorded in the transcript) were not addressed. 24 Similar considerations are relevant to what was put in issue and argued concerning the matter of the purported assignment. The learned magistrate made "the finding that on the balance of probabilities she received the document from Patons". Leaving aside any question of ambiguity as to what was found, there was a failure to address the questions that were argued concerning whether what had been received satisfied the statutory requirements (s12 of the Conveyancing Act 1919). 25 How the learned magistrate came to the figure of $4,000 is unclear. It can only be seen as a creature of guesswork. It does not constitute a finding made in accordance with law. 26 I have not sought to address all of the matters that have been raised in argument during the appeal. What has been said is not intended to be exhaustive. In the light of the misdirections and the inadequacy of the disclosure of reasoning process, it seems to me that it is unnecessary to pursue other matters. The court has no alternative but to allow the appeal. 27 The taking of that course is done with reluctance. The dispute between the parties involves a very modest sum. By now, it seems to be inevitable that the parties have already incurred costs grossly disproportionate to the amount in dispute. A further hearing will exacerbate that unfortunate state of affairs. It can be expected that such a trial will also be disproportionately expensive. Both parties face the risk of an unfavourable result (the defendant's claim may fail or the plaintiff may face a larger judgment sum ($6,650.47)). 28 I did exhort the parties to look to a commercial resolution of their dispute. However, there seems to be no prospect that such a result will come to pass. The impression given is that the parties ceased talking a long time ago. 29 The judgment and orders of the Local Court are set aside and the matter is remitted to the Local Court for determination according to law. The defendant is to pay the costs of the summons. If so entitled, it is to have a certificate under the Suitors' Fund Act 1951. The exhibits may be returned. ********** Last Modified: 10/26/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.